Residents see increase in property taxes

By David Fenker

Wabash County property owners may be paying more this year in taxes, but, for most, it's not because of a tax increase.
The increase is due to a decrease in the property tax relief credit, shown on line 4a of the “Special Message to Property Owner” sheet included with the tax bill.

Property tax bills were mailed Tuesday, April 3, and since that time county council members have fielded questions regarding the increase in taxes owed.

According to County Council Chairman Randy Curless, the county council voted last October to decrease a property tax relief credit – which effectively lowered property taxes – in order to increase revenue for the county.

“For the past 10-11 years,” he said,  “… we've remanded back to the residents somewhere near $6 million a year for property tax relief.

“What the council did did not change the tax rate …  we took 50 percent of the credit back to help run the county.”

County property tax rates actually did increase slightly this year, from .3461 percent paid in 2017 to .363 percent paid in 2018. Most township property tax rates decreased, but residents of the City of Wabash, Lagro Township and the towns of Lagro and LaFontaine will see also increased rates.

“[The decreased rates] helps some, but the offset of our credit took that away,” County Treasurer LuAnn Layman said.
According to Curless, the average Wabash County homeowner should see an increase of $200 in taxes owed due to the credit reduction.

“I'm hearing all kinds of number – 'Mine went up $1,400,' stuff like that,” he said. “Generally, if they look at their property taxes, something else has changed other than the credit. Maybe the appraisal had gone up or something like that.”

Taking back the credit is not uncommon, he added, noting that some counties have even eliminated their property tax relief credits.

“We talked about taking 25 percent,” Curless said, “and we felt like, probably what would happen is, we would have got by on that for a few years, and then we would have come back and had to do it again. Nobody likes change, so we felt like we would do that 50 percent and we felt like we would get by on that.”

He noted that the council felt totally removing the credit was unnecessary.

According to Curless, Wabash County has one of the highest income tax rates in the county, but has the second-lowest property tax rate of all 92 Indiana Counties.

“It takes a combination of property taxes and income taxes to run the county,” he said. “That's where our revenues come from. So, getting that balance right is kind of a tricky part.”

Since the credit was first established, Curless said, the county's budget needs have increased.

He highlighted what he calls “an unfunded mandate” from the state regarding housing sentenced level six felons in the county jail (rather than sending them to a state facility) as one of several factors contributing to the county's rising costs.
“There are a lot of things … behind the scenes that are causing this need to increase our revenue just for operation,” he said.

Another issue is a declining and aging population, he said, coupled with a lack of new employers.

“A lot of our problems would subside if we could [bring more jobs into the county],” Curless said.
He emphasized that the additional revenue is not earmarked for a specific project, nor is it destined for schools.

“The school has their separate funding formula, and the county council has no say in that at all,” he said.
Schools do receive funding via property taxes, but the county's tax rate and credit are separate from the schools' tax rates, which vary by district.

When asked about a recent council decision to seemingly turn away increased revenue through a tax abatement to help Midwest Poultry Services rebuild after a fire last fall, Curless again said that balance is crucial to keeping the county funded.

“[Balance] is the key word,” he said. “Our balance was … we looked at this and said, after about two years, they're going to be back paying the same [amount in taxes] as they were before the fire. As that abatement goes down – which, it goes down every year for 10 years – as that goes down, well then the county will actually be making more money because of the increase in property and buildings that they invested.”

Property taxes are a percentage of a property's assessed value, and include tax rates established by the county, township, school district, library, and city or town that serve the property. Property taxes are capped at three rates: 1 percent for a homestead, 2 percent for a residential building such as a rental, and 3 percent for a commercial building.

“If you live in a $100,000 house, your 1 percent would be $1,000, but, if your taxes came out to be $1,500, that $500 is what the state considers hitting a cap,” County Auditor Marcie Shepherd said. “So, that taxpayer is not liable for that $500 … because we can only charge them up to the 1 percent, which is $1,000.”

Layman added, “If that house was a rental, that would be $100,000 times 2 percent – that same house could be taxed up to $2,000. It depends on if it's a home site that the people live in – a homestead – or another type of house.”

Funds lost to property tax caps must be made up by the county, and distributed to the other taxing entities – thereby decreasing revenue for the county government even more.

In response to comments from residents regarding cutting costs, Curless said Wabash County is pretty frugal.

“Most people are going to say, 'We're spending our money on things we don't need to, we need to cut back,'” he said. “I'd love for them to start giving me details … what services do you want us to cut back first?”

He noted that, in terms of personnel, Wabash County is “running very bare-bones.”

“We're very efficient as far as labor goes [compared to neighboring counties],” he said, “and that's where the most of your tax money goes, is toward labor, one way or another.”

Additionally, those “unfunded mandates” from the state are budget items that the county is legally required to fund – leaving things such as road repairs, economic development and nonprofit support in the balance

Posted on 2018 Apr 10